Japanese economy rallies in final Q of 2018

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  • 3 months ago
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Japanese economy rallied in the final quarter of 2018 due to solid spending by households and companies, suggesting that the previous quarter's contraction was a temporary setback.

The world's third-largest economy after the U.S. and China expanded at an annualized rate of 1.4% in the October-December period following a 2.6% contraction in the previous quarter,  experts point to the recent softness in China's economy that could cap Japan's growth going forward, after all China is Japan's biggest trading partner.

According to Goldman Sachs economist, Naohiko Baba, "Risk is tilted toward the downside, in our view, with further economic slowdown in China and around the globe and a deterioration in sentiment due to trade friction as the main downside risk factors."

Private consumption, which accounts for nearly 60% of gross domestic product, increased 0.6% on quarter in the October-December quarter, while capital expenditures rose 2.4%, as the impact of natural disasters that hit the country last summer tapered off.

Exports, an engine of the Japanese economy, subtracted 0.3 percentage point from growth due to the slowdown in China.



Source: Smart Trend Team